Critical Analysis: MediaAlpha (NYSE:MAX) & Alight (NYSE:ALIT)

Alight (NYSE:ALIT) and MediaAlpha (NYSE:MAX) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Risk & Volatility

Alight has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, MediaAlpha has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Alight and MediaAlpha, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alight	0	0	7	0	3.00
MediaAlpha	1	0	6	0	2.71

Alight presently has a consensus price target of $12.00, suggesting a potential upside of 62.82%. MediaAlpha has a consensus price target of $22.71, suggesting a potential upside of 32.29%. Given Alight’s stronger consensus rating and higher probable upside, research analysts clearly believe Alight is more favorable than MediaAlpha.

Valuation and Earnings

This table compares Alight and MediaAlpha’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alight	$3.41 billion	1.21	-$345.00 million	($0.62)	-11.89
MediaAlpha	$388.15 million	2.91	-$40.42 million	($0.68)	-25.25

MediaAlpha has lower revenue, but higher earnings than Alight. MediaAlpha is trading at a lower price-to-earnings ratio than Alight, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

96.7% of Alight shares are owned by institutional investors. Comparatively, 64.4% of MediaAlpha shares are owned by institutional investors. 5.3% of Alight shares are owned by company insiders. Comparatively, 11.5% of MediaAlpha shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Alight and MediaAlpha’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alight	-9.19%	5.14%	2.28%
MediaAlpha	-7.76%	N/A	-21.56%

Summary

Alight beats MediaAlpha on 9 of the 14 factors compared between the two stocks.

About Alight

Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide. The company operates through two segments, Employer Solutions and Professional Services. The Employer Solutions segment offers employee wellbeing, integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management, retiree healthcare and payroll; and operates AI-led capabilities software. The Professional Services segment offers consulting offerings, such as cloud advisory, deployment, and optimization services for cloud platforms. The company provides Alight Worklife, an intuitive, cloud-based employee engagement platform. Its solutions enable employees to enrich their health, wealth, and wellbeing that helps organizations achieve a high-performance culture. Alight, Inc. was founded in 2020 and is based in Lincolnshire, Illinois.

About MediaAlpha

MediaAlpha, Inc., through its subsidiaries, operates an insurance customer acquisition platform in the United States. It optimizes customer acquisition in various verticals of property and casualty insurance, health insurance, and life insurance. The company was founded in 2014 and is headquartered in Los Angeles, California.